Header graphic for print

Labor Relations Update

Hail Mary: NLRB Regional Director Holds College Football Players are Employees

Posted in Bargaining units, NLRA, NLRB, Section 7, Uncategorized

Football Tackle

On March 26, 2014, Peter Sung Ohr, the Chicago Regional Director of the National Labor Relations Board (“NLRB”) ruled that members of the Northwestern University football team receiving athletic scholarships are employees, and not students, under the National Labor Relations Act, allowing them the opportunity to unionize through an NLRB election.

First and Ten: A Day in the Life

The Regional Director’s decision provides a detailed description of the daily life and sports-related activities of a NCAA Division I Northwestern football player, often reiterating that the time players devote to football exceeds the time players devote to academic activities. Everything from weight room conditioning to a mandatory team dinner-and-a-movie is included in the exposition of the players’ schedule, with an emphasis on the time commitment required for all football-related activities, amounting to about 40 to 50 hours per week during the season.

In the Pocket: The Director’s Opinion

In finding that the scholarship players were within the common law definition of “employee,” the Regional Director focused almost exclusively on the “compensation” they receive for playing football at the school and the strict teams rules and standards for participating on the team.

In the Regional Director’s view, the players perform services for the benefit of the University, since the school receives revenue from its football program, and are compensated in the form of tuition, room and board, and money for books. Addressing the players’ unique form of compensation, the Regional Director stated that “[w]hile it is true that the players do not receive a paycheck in the traditional sense, they nevertheless receive a substantial economic benefit for playing football.” Also acknowledging that the players might not feel pressure to perform on the field, as their scholarships have a four-year term, the opinion emphasized the fact that players’ scholarships can be reduced or cancelled for things like abusing team rules.

Citing the detailed gameday itineraries, team rules, and strict monitoring of player behavior by coaches, the Regional Director ruled that the scholarship players are subject to the University’s “control” in the performance of their duties. After describing the efforts that football coaches make to aid the players in their academic pursuits, such as mandatory study halls and tutoring, the Regional Director mused that “these noble efforts by the Employer, in some ways only further highlight how pervasively the players’ lives are controlled when they accept a football scholarship.”

However, only scholarship players are declared employees in the decision. In the Regional Director’s view, walk-ons who do not receive scholarships are not entitled to be in the bargaining unit, because they play only for the “love of the game.”

 Touchdown or Fumble at the Goal Line? Brown Inapplicable

The Regional Director, without much explanation, rejected the idea that Board’s opinion in Brown University, 342 NLRB  483 (2004) which held that graduate students at universities were not employees under the Act, had any application to football players.

Despite this, the Regional Director than went on to explain why, even if Brown did apply, the football players should be considered primarily employees. The opinion considers each of the factors the Board focused on in Brown:

  • their principal time commitment is to football activities rather than academic activities;
  • unlike in Brown, where the graduate assistants’ teaching and research duties constituted a core element of their graduate degree requirements, the players’ football activities are not required to obtain their undergraduate degree;
  • the academic faculty members do not oversee the athletic duties that the players perform, which mitigates the concern in Brown that imposing collective bargaining would have a “deleterious impact on overall educational decisions” by the academic faculty; and
  • the players’ compensation is not financial aid to attend the university regardless of the quality of their work, as in Brown, but is rather tied to their athletic services, and would be revoked if they quit or were released from the team.

 Instant Replay Challenge:  Appeal Likely

An appeal is most certainly forthcoming to the full Board in Washington – although given the time it has taken the Board to issue decisions in its cases on medical residents and graduate students, this issue could be around for a very long time before it gets resolved. In the meantime, we are likely to see more schools faced with these types of organizing campaigns and elections among their scholarship athletes.

Advice, Anyone?

Posted in Advice, General Counsel, Mandatory submissions, NLRA, NLRB

The NLRB General Counsel has issued a memorandum setting out those cases and issues he wants sent from the regional offices to the Division of Advice in Washington, DC.  The Division of Advice, as the name suggests, is the arm of the General Counsel’s office which provides legal advice to the General Counsel and to the Regional Directors in the form of Advice Memoranda.  Depending on the issue, the General Counsel may be personally involved in formulating those memoranda. 

The Division of Advice performs a key function in the General Counsel’s office, since it addresses all the cutting edge and unresolved issues presented to the agency.  It assists the General Counsel in addressing those issues and fashioning a consistent nationwide prosecutorial policy on them.  The Division of Advice also assists the agency in identifying cases and developing arguments where the General Counsel wants to propose that the Board make a change in existing law.  Indeed, as you go through this memorandum, you can identify those areas where there appears to be an interest in overruling or augmenting Board legal precedent, as well as in adapting Board law to new developments in the law and in the workplace. 

Virtually every NLRB General Counsel has issued a mandatory advice submission memorandum, so this is nothing unusual.  But General Counsels may differ in what they want sent to the Division of Advice, so this memorandum offers an interesting insight into the thinking and priorities of General Counsel Griffin.

Is Deferral to Labor Arbitration Awards in Jeopardy?

Posted in Arbitration, Deferral, NLRA, NLRB

The National Labor Relations Board has issued a press release announcing its intention to revisit precedent created under a pair of Board decisions nearly 59 and 30 years old, respectively.  The precedent involves under what circumstances the NLRB will defer to decisions of labor arbitrators in cases where there are pending NLRB unfair labor practice charges arising out of the same facts.

In its press release, the Board described the current precedent this way:

Under the existing standard, the Board defers to an arbitration award when (1) the arbitration proceedings are fair and regular; (2) all parties agree to be bound; and (3) the arbitral decision is not repugnant to the purposes and policies of the Act.  Spielberg Mfg. Co., 112 NLRB 1080 (1955).  Further, the arbitral forum must have considered the unfair labor practice issue.  The Board deems the unfair labor practice issue adequately considered if (1) the contractual issue is factually parallel to the unfair labor practice issue, and (2) the arbitrator was presented generally with the facts relevant to resolving the unfair labor practice issue.  Olin Corp., 268 NLRB 573 (1984).  The burden of proof rests with the party opposing deferral.

The Board explained that the General Counsel (based on Memorandum GC 11-05 (January 20, 2011)) has asked the Board to change existing law regarding whether the unfair labor practice issue was adequately considered (developed in the Olin case) in the following way:

Under his proposal, the party urging deferral would bear the burden of demonstrating that (1) the collective-bargaining agreement incorporates the statutory right, or the statutory issue was presented to the arbitrator, and (2) the arbitrator correctly enunciated the applicable statutory principles and applied them in deciding the issue.  If the party urging deferral makes that showing, the Board would defer unless the award was clearly repugnant to the Act. 

The Board issued an order in the case in which the issue is presented (Babcock & Wilcox Construction Company, Case 28-CA-022625) setting out the questions for amici to address.  Principal amicus briefs are due by March 25, 2014, and may not exceed 50 pages.  Responsive briefs are due by April 8, 2014, and may not exceed 25 pages.

* * * * * 

As General Counsel of the NLRB I asked the Division of Operations Management to issue Memorandum OM 10-13 (November 3, 2009).  The OM Memorandum noted, among other things, that in contrast to the Spielberg/Olin factors applied by the Board, the United States Court of Appeals for the District of Columbia Circuit had adopted in effect a two step test when reviewing those Board determinations: (1) whether the arbitral procedures were fair and regular, and (2) whether the union had violated the duty of fair representation.  E.g., Titanium Metals Corp. v. NLRB, 392 F.2nd 439 (D.C. Cir. 2004).   This test would virtually eliminate the ability of the Board to determine whether an unfair labor practice issue was adequately considered and whether the arbitrator’s award was “repugnant to the Act.”   

Because of the major role played by the D.C. Circuit in the review of Board cases (it has jurisdiction to hear petitions for review of NLRB decisions filed by private parties in virtually any case), the OM Memorandum noted ”[t]he need for refinement” of the Spielberg/Olin test, and that “a new approach to cases involving arbitral deference may be warranted.”  Fifteen months later, Acting General Counsel Solomon issued Memorandum GC 11-05, setting forth the test now sought by the General Counsel in the Babcock & Wilcox case.

It will be interesting to see what the Board does in this case.  The Board clearly has an interest in arbitration awards (and grievance settlements) which implicate statutory rights under the National Labor Relations Act.  But it should avoid any standard that undermines the utility and finality of labor arbitration by making grievance-arbitration procedures simply another step in the NLRB process.

They’re Ba-ack: NLRB to Re-Propose Election Regulations

Posted in NLRA, NLRB, Representation Elections, Rulemaking

As expected, the NLRB has announced that it is again proposing regulations to amend its representation case election procedures.  A copy of the Notice of Proposed Rulemaking submitted to the Federal Register for publication can be viewed here.  The proposed regulations appear identical to those the Board attempted to promulgate in 2011. At that time the Board received written comments and held a two-day public hearing where dozens of interested parties testified. 

In the end, the Board promulgated only a portion of the regulations, which were immediately challenged in litigation.  A federal district court in the District of Columbia overturned the promulgated regulations, holding that the Board had acted with only two members to promulgate them, which was not a sufficient quorum.  The Board appealed the district court decision to the District of Columbia Circuit.  While the Board’s appeal was pending, that court issued its Noel Canning decision holding that certain recess appointments to the Board had been unlawful.   The Noel Canning issue was quickly asserted as an additional ground for overturning the promulgated regulations and the Board’s appeal was placed in abeyance pending the outcome of the Supreme Court’s review in Noel Canning, as we discussed here

In the face of these major legal entanglements and the resulting delay, the Board voluntarily dismissed its appeal and withdrew the promulgated regulations.  As we discussed here, this was a tactical move designed to clear the way for again proposing the regulations.  Although it is possible that the Board could have attempted to rely on the record created in 2011, it is again taking comments through April 7, 2014, with reply comments due by April 14, 2014.  The Board has also said it would hold another public hearing the week of April 7, 2014.

NLRB ALJ Says That Under D.R. Horton, Actions Speak As Loudly as Words

Posted in Arbitration, NLRA, NLRB, Protected activity, Unfair Labor Practices

A few weeks ago, we posted about the Fifth Circuit’s decision in the D.R. Horton case and the NLRB’s doctrine of non-acquiescence.   As you will recall, in D.R. Horton, the NLRB held that an employer violates the right of employees to engage in concerted activity by maintaining an arbitration program which prohibits employees from pursuing class or collective actions in court or before the arbitrator.  The NLRB’s D.R. Horton decision was reversed on the merits by the Fifth Circuit, but under the NLRB’s policy of not acquiescing in adverse court of appeals decisions, the NLRB General Counsel continues to authorize complaints in these so-called “class action waiver” cases. 

Now we have an NLRB administrative law judge’s decision that serves not only as an example of the non-acquiescence doctrine, but takes the NLRB’s ruling in D.R. Horton a significant (and not inconsistent) step further.  In Leslie’s Pool Mart, Case 21-CA-102332 (January 17, 2014), the General Counsel issued a complaint which required the judge to decide whether the employer’s “mandatory arbitration agreement violates . . . the Act even though the agreement does not expressly prohibit employees from engaging in protected concerted activities.”  (Slip op. at 4.)

In a nutshell, here is what had happened:  The employer maintained an arbitration program that required its employees to submit employment related claims to arbitration.  However, the employer did not include a provision requiring employees to waive class and collective actions.  A separated employee filed a class action on behalf of himself and other current employees alleging that the class had been improperly denied certain overtime pay by the employer.  The employer moved to dismiss the suit and compel individual arbitration of each claim, pursuant to the employer’s arbitration program.   

The General Counsel maintained that even though the employer’s arbitration program was silent on the “class action waiver” issue, the employer violated the law by seeking an order from the court dismissing the class action and compelling individual arbitration of the claims. The administrative law judge rejected a number of procedural and substantive defenses asserted by the employer and agreed with the General Counsel:

Applying Board precedent to this case, I find that Respondent’s arbitration agreement violates the Act.  While the arbitration agreement does not, on its face, prohibit collective or class action, it has the effect of doing so as evinced when Respondent, in moving to compel arbitration of his claims, sought to preclude . . . a class action lawsuit and maintained that ‘arbitration is the elected and required forum for resolving [Charging Party’s] individual claims.’

(Slip op. at 7, emphasis in original.)

This case well illustrates that the “class action waiver” issue is not only alive and well at the NLRB, but that it is being extended to apply beyond the employer’s written policy to the employer’s actions taken to enforce even a facially lawful policy. 

For what it is worth, this is precisely contrary to the memorandum I issued as General Counsel (which was specifically rejected by the NLRB in D.R. Horton).  There, I said that lawful employer arbitration programs could be asserted as a defense to attempted class action court litigation.  In my view, this would allow the courts, as they have traditionally done, to weigh whether a class action was necessary to vindicate substantive rights under the various employment statutes pursuant to which such claims are generally brought.  It is that standard, I maintained, which ought to govern the legality of such class action waivers.

Video Interview: Discussing the Noel Canning Oral Arguments with LXBN TV

Posted in NLRA, Recess appointments

Following up on our ongoing coverage of the NLRB recess appointments, and my recent post on the Supreme Court oral arguments in NLRB v. Noel Canning, I had the opportunity to again speak with Colin O’Keefe of LXBN on the matter. In this most recent interview, I share my thoughts on whether the Supreme Court justices signaled which way they might rule and what it could mean if the Supreme Court sides with the D.C. Circuit and rules the recess appointments were unconstitutional.

Noel Canning Oral Argument: Justices Express Skepticism

Posted in NLRA, Recess appointments

My experience is that oral arguments, while often interesting, rarely open much of a window into exactly how a court will actually decide the case.  Today’s Supreme Court argument in NLRB v. Noel Canning may be an exception.  Nearly all of the Justices had questions which suggested skepticism over the validity of the President’s January 4, 2012 recess appointments to the NLRB.

The skepticism seems to be rooted in two principal concerns, which are not necessarily shared by each Justice.  First, the plain wording of the Constitution’s Recess Appointment Clause simply mandates affirmance of the D.C. Circuit’s decision.  Second, disagreements over appointees are consigned by the Constitution to the political process, which includes the Senate’s ability to prevent recess appointments by limiting or eliminating recesses.

Further, with respect to intra-session recesses, the Court appears to be reluctant to delve into deciding just how many days must pass before a President could make an intra-session recess appointment.  Were the Court to rule that the Constitution allows intra-session recess appointments, I think it would very likely leave the question of if and when an intra-session recess occurs in the hands of Senate.

There were also questions by the Justices about the practical impact of upholding the D.C. Circuit, and whether it would cause wholesale disruption of past actions of putative recess appointees at the NLRB and elsewhere in the federal government.  For the most part, those questions were answered by counsel for the company, who indicated that mootness, statutes of limitation, the de facto officer doctrine and other judicially and legislatively developed theories, would limit any such disruption.  Further, while the NLRB itself may be substantially impacted, there was no suggestion by any of the counsel at argument that the impact would overwhelm the agency or cause undue problems going forward.

As I said at the beginning, it is generally dangerous to predict the outcome of a case based on oral argument.  You can take what you want from the foregoing, and the numerous other articles that are being written, and draw your own conclusions.  We should all know the answer before the end of June.

The NLRA Rights Poster Lives on Through Other Means

Posted in NLRA, NLRB, Rights Poster

The NLRB’s decision not to pursue Supreme Court review in the NLRA rights poster cases  (which, depending on what happened behind the  scenes, may have in reality been a decision by the Solicitor General of the United States) should not have come as a complete surprise.  The likelihood of review being granted was small, and even if granted would have carried with it the substantial risk of a decision at the Supreme Court containing language even further restricting the NLRB’s rule making authority. 

Instead, according to a statement issued by the NLRB, the agency will continue to pursue a number of policies which it hopes will raise its profile among workers and workers-to-be.  These include making the poster voluntarily available on its web site; providing NLRB apps for smart phone users; devoting a special section of its web site to the rights of unorganized workers; and other similar measures and pages on its web site.

The NLRB also continues to engage in traditional outreach activities, a program I encouraged when I was General Counsel. This type of outreach consists principally of presentations to interested groups, be they affiliated with employers or unions, as well as other civic groups and educational institutions.  This traditional engagement with the public is well received in most quarters and does not carry with it any legal obligations or threat of sanctions.  Rather, it is completely voluntary on the part of any group wishing to host an NLRB speaker.  During most of my term we averaged well over 500 such outreach activities each year emanating from the NLRB Regional Offices, not Washington, DC. 

So, while the NLRB poster may be dead, the Board’s outreach efforts continue, both high-tech and low-tech.  Further, the U.S. Department of Labor’s similar NLRA rights poster for government contractors remains in force, and government contractors must continue to display that poster.

A Race to Nowhere: Supreme Court Dismisses Neutrality Agreement Case

Posted in NLRA, Uncategorized

Last month, the Supreme Court heard oral argument in UNITE HERE Local 355 v. Mulhall, a case claiming that a neutrality agreement violated § 302 of the Labor-Management Relations Act, 29 U.S.C. § 186, the anti-union bribery statute which makes it a crime for an employer to give “money or other thing of value” to a union.  Yesterday, in a surprise move, the Court abruptly dismissed the closely watched case in a single line opinion stating that the appeal was “improvidently provided.”

 ”And They’re Off!”

The case arose when an employee of Mardi Gras Gaming, a greyhound racetrack operator, challenged the neutrality agreement, which provided Local 355 with:

  • access to the employer’s premise to organize employees during non-work hours
  • a list of employees, their job classifications, departments and addresses
  • a promise to remain neutral to the unionization for employees

In turn, the union agreed to support a state ballot initiative promoting casino gambling that would benefit the employer.

On a motion to dismiss, the District Court found that organizing assistance could not be a § 302 violation relying on decisions from the Third and Fourth Circuits.  See Adcock v. Freightliner, LLC, 550 F.3d 369, 374 (4th Cir. 2008); Hotel Emps. & Rest. Emps. Union, Local 57 v. Sage Hospitality Res., LLC, 390 F.3d 206, 219 (3rd Cir. 2004).

The Eleventh Circuit, in reviewing the motion to dismiss decision, reversed and remanded:

[i]t is too broad to hold that all neutrality and cooperation agreements are exempt from the prohibitions in § 302.  Employers and unions may set ground rules for an organizing campaign, even if the employer and union benefit from the agreement.  But, innocuous ground rules can become illegal payments if used as valuable consideration in a scheme to corrupt a union or to extort a benefit from an employer.

Mulhall v. UNITE HERE Local 355, 667 F.3d 1211 (11th Cir. 2012).   Thus, given the procedural context where the court had to take the facts as pled and the pleadings stated that the union spent over $100,000 in support of the ballot initiative, the Circuit Court sent the case back for further proceedings on the intent and purpose of the neutrality agreement.

“They’re in the Final Turn…?”

Before the case went back to the District Court, Local 355 appealed and the Supreme Court granted review.  After full briefing and oral argument last month, Court-watchers were expecting a decision that would address the core question of whether neutrality agreements, which have become a key organizing tool for unions, particularly in the hospitality and service sectors, would remain lawful.

There was still concern, however, that any decision in this case alone would not have given clear guidance on the topic, given the unique procedural posture of a motion to dismiss, combined with the significant level of political support that the union was alleged to have provided the employer in exchange for the neutrality agreement.  For example, would a decision finding that the agreement in these circumstances was a “thing of value” have any relevance to (a) a neutrality agreement where no political support was provided, (b) one that is entered into to resolve a corporate campaign, or (c) an agreement that is simply included to address future locations contained in an overall collective bargaining agreement?

Left Chasing the Tail

All those questions are left entirely unanswered by the Court’s action today.  Moreover, it adds even more questions to the mix about whether a case like this can ever be heard.  Although the Court acted in a one-line decision, Justice Breyer issued a dissent making clear the Court’s action was taken because of concerns over whether the current case is moot, and, more importantly, whether the initial plaintiff had Article III standing to sue or could bring a private right of action under § 302.

None of these  issues were addressed and will not be considered until another case on the issue reaches the Court.  Indeed, like the greyhound chasing its own tail, the Supreme Court’s dismissal leads us right back to where we were, with two circuits upholding neutrality agreements while the Eleventh Circuit disagrees given the particular circumstances it was reviewing on a motion to dismiss.

In light of this split and given the criminal nature of §302, employers (particularly those operating in the Eleventh Circuit) must continue to evaluate the purpose and intent of any request for a neutrality agreement to ensure that entering into the agreement cannot be considered providing an unlawful “thing of value” in violation of §302.